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Yahoo
2 days ago
- Business
- Yahoo
4 Top No-Load Mutual Funds to Add to Your Portfolio
Major U.S. indexes, such as the Nasdaq Composite and the Dow Jones Industrial Average, have recovered from the start of 2025 but remain down by 0.1% and 0.5%, respectively, whereas the S&P 500 has gained 1%. Investors' sentiment remains clouded due to mixed domestic economic data, geopolitical tensions and ongoing concerns regarding Trump's foreign tariff policy with major trading partners. The personal consumption expenditure (PCE) index, the Federal Reserve's preferred inflation gauge, has climbed 0.1% sequentially in April and 2.1% on a year-over-year basis, after increasing 2.3% in March. Consumer spending, which is the largest component of the U.S. GDP, rose 0.2% in April after an unrevised 0.7% jump in March. Personal income increased 0.8% month over month in April. Disappointing jobs data raise concerns as businesses struggle due to tariff uncertainties. The economy added only 37,000 private employees in May, less than the downwardly revised 60,000 jobs in April and sharply lower than the consensus estimate of 110,000. The Institute for Supply Management's (ISM) Services Purchasing Managers Index (PMI) fell to 49.9 in May from April's reading of 51.6. Any reading below 50% indicates a contraction in service activities. Geopolitical tension has flared up due to Ukraine's fresh attack on Russia's military assets, which has caused panic and might affect the global supply chain. Amid the current market conditions, investors looking for higher returns can consider no-load mutual funds like Fidelity Select Semiconductors Portfolio FSELX, Invesco SteelPath MLP Select 40 MLPTX, DWS Science and Technology KTCSX and Fidelity Select Defense & Aerospace FSDAX as these have a low expense ratio, which can translate into higher returns. Other factors such as the funds' performance history, investment style and risk tolerance also act in their favor. Investors with disposable income who wish to diversify their portfolios can opt for no-load mutual funds. These passively managed funds don't have any commission fees or any other charges for buying and selling that are generally associated with actively managed funds. The sales charges — referred to as a 'front-end load,' which is charged upon purchasing shares, or 'back-end load,' which is charged upon the selling of shares — are absent in such funds because shares are distributed directly by the investment company, instead of any third-party involvement like a broker, advisor or other professionals. Even a few additional basis points saved in fees can boost the overall return by minimizing expenses. However, charges like the fund's expense ratio, 12b-1 fees for marketing, distribution, and service, redemption fees, exchange fees, and account fees are commonly charged even if there is no load. The load charges are generally within the range of 0-6%. To understand the math, let's assume an investor wants to invest $1000 in a mutual fund that has a 5% entry and exit load. Then, $950 ($1000-$50 [5% of $1000]) is left with the mutual fund house to invest. Now, let's assume the fund has given a 15% return over the year. So, the current value of the portfolio is $1092.5 ($950+ $142.5 [15% of $950]). Now, when an exit load of 5% is applied, the investor is left with $1037.87 ($1092.5-$54.63 [5% of $1092.5]). According to the above hypothesis, the returns earned by the investor with front and back load are 3.78%, whereas he could have enjoyed a much higher return without load. We have thus selected four no-load mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money). Fidelity Select Semiconductors Portfolio invests most of its net assets in common stocks of domestic and foreign companies that areprincipally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX chooses to invest in stocks based on fundamental analysis factors such as each issuer's financial condition and industry position, and market and economic conditions. Adam Benjamin has been the lead manager of FSELX since March 15, 2020. Most of the fund's exposure was to companies like NVIDIA (25.0%), Taiwan Semiconductor Manufacturing (8.3%) and Broadcom (8%) as of Feb. 28, 2025. FSELX's three-year and five-year annualized returns are nearly 24.4% and 28.3%, respectively. FSELX has an annual expense ratio of 0.62%. To see how this fund performed compared to its category and other 1, 2, and 3 Ranked Mutual Funds, please click here. Invesco SteelPath MLP Select 40 fund invests most of its assets, along with borrowings, if any, in the master limited partnership of companies, which are engaged in the transportation, storage, processing, refining, marketing, exploration, production, and mining of minerals and natural resources. MLPTX advisors also invest in derivatives and other instruments with similar economic characteristics in the same industry. Stuart Cartner has been the lead manager of MLPTX since April 1, 2010. Most of the fund's exposure was in companies such as MPLX (8.4%), Energy Transfer (7.8%), and Western Midstream Partners(7%) as of Feb. 28, 2025. MLPTX'sthree-year and five-year annualized returns are 20.10% and 28.4%, respectively. MLPTX has an annual expense ratio of 1.01%. DWS Science and Technology fund invests most of its assets, along with borrowings, if any, incommon stocks and initial public offerings of domestic science and technology companies, irrespective of their market capitalization. KTCSX advisors may also invest in foreign companies from the technology sector or other industries within the technology sector from developed and emerging market economies. Sebastian P. Werner has been the lead manager of KTCSX since Dec. 1, 2017. Most of the fund's exposure was in companies like Meta Platforms (9.6%), NVIDIA (8.1%) and Microsoft (7.7%) as of Jan. 31, 2025. KTCSX's three-year and five-year annualized returns are 18.8% and 17.3%, respectively. KTCSX has an annual expense ratio of 0.68%. Fidelity Select Defense & Aerospace fund invests most of its net assets in common stocks of domestic and foreign companies that areprincipally engaged in research, manufacture, or sale of products or services related to the defense or aerospace industries. FSDAX advisors choose to invest in stocks based on fundamental analysis factors such as financial condition and industry position, along with market and economic conditions. Clayton Pfannenstiel has been the lead manager of FSDAX since December 27, 2021. Most of the fund's holdings were in companies like General Electric (20.9%), The Boeing Company (11.9%) and Raytheon Technologies (10%) as of Feb. 28, 2025. FSDAX's three-year and five-year annualized returns were 17.8% and 16.3%, respectively. FSDAX has an annual expense ratio of 0.65%. Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FSDAX): Fund Analysis Report Get Your Free (FSELX): Fund Analysis Report Get Your Free (MLPTX): Fund Analysis Report Get Your Free (KTCSX): Fund Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Zawya
06-05-2025
- Business
- Zawya
UK services sector contracts at steepest pace since 2023, PMI shows
LONDON: Britain's services sector, accounting for much of the economy, shrank in April for the first time since October 2023 and at the fastest pace in more than two years, according to a survey that showed U.S. tariff turmoil is hammering exports and sentiment. The S&P Global UK Services Purchasing Managers Index dropped to 49.0 last month from March's 52.5, the steepest pace of decline since January 2023 although it was marginally above a preliminary reading for April of 48.9. New orders and employment both fell more sharply than in March, while input cost pressures increased at the fastest rate since July 2023 - something the Bank of England is likely to note ahead of its interest rate meetings this week. Survey compiler S&P Global said the faster input inflation reflected a rise in payroll taxes introduced by British finance minister Rachel Reeves and a nearly 7% increase in the minimum wage. The monthly fall in hiring was the seventh in a row. "UK service sector output slipped into contraction for the first time in one-and-a-half years as heightened business uncertainty weighed on order books during April," Tim Moore, economics director at S&P Global Market Intelligence, said. "Survey respondents often commented on the impact of global financial market turbulence in the wake of US tariff announcements." Overseas orders fell by the most since February 2021, largely due to the challenging market conditions and hesitancy among firms caused by U.S. President Donald Trump's tariffs. A PMI survey last week for British manufacturing showed export orders fell at the sharpest pace since May 2020. Prices charged by services firms climbed by the most in almost two years, S&P said. The BoE is expected to reduce its benchmark Bank Rate to 4.25% from 4.5% on Thursday and investors are wondering if the central bank will signal a quicker pace of cuts further ahead. BoE policymakers have said Trump's trade policies will hit growth although the impact on inflation is not yet clear. The International Monetary Fund last month cut its forecast for British economic growth in 2025 to 1.1% from a previous estimate of 1.6%, but said the country was likely to grow more strongly than its peers in Europe including France and Germany. The PMI's gauge of output expectation for the year ahead fell sharply to its lowest since October 2022. Respondents cited a combination of the rising payroll costs, cutbacks to non-essential spending by clients and fears of a global recession. The composite PMI - which combines the services data with last week's manufacturing survey - fell in April to 48.5 from 51.5 in March, its lowest reading since September 2023 but slightly revised up from a flash estimate of 48.2. (Reporting by Suban Abdulla; Editing by William Schomberg and Toby Chopra)
